Market analysis is a key part of your success as a binary options trader. It doesn’t matter what type of analysis you decide to use, but you do need to do something in order to give yourself a leg up on the market. One of the most popular methods of analysis today for short term traders is to trade the news. The news–unless it’s major and long lasting–usually does not have a huge impact upon prices, but this doesn’t really matter for the binary trader since they only need to realize a tiny change in a short period of time in order to see the full benefit of a profitable return. In this light, acting upon the news is perfect for this type of trading.
Your timing needs to be very accurate, though. For example, on November 27th, there was a report of erroneous trading that took place during the first minute that the Nasdaq was open for business this morning. As a result, they ended up cancelling many trades for certain stocks. Once this report hit, Nasdaq prices dropped significantly. Consumers are concerned about the fact that problems exist, and are therefore exiting positions in order to keep their money safe. If you acted at the right moment with a few choice put options, you could have made huge profits very quickly. An even bigger problem right now is that the problem has not yet been publicly identified. It might have been something small, like a minor and very easy to fix computer glitch. Or it might have been something major, such as a security breach within trading systems. Until the problem is identified and solved, uncertainty will exist. But the majority of decline might have already taken place. As a trader of the news, the quicker you acted here, the more profits you could have made.
A total of 11 securities were identified as having been victim of the erroneous trading, none of which are usually traded within the major binary brokers. This can be seen as a limitation, or as a freedom. The truth is, if you are trading the news, you typically are not put under the same constraints as other traders. News happens for every type of asset, every sector, and almost all the time. What’s more, news is very easily accessible; you just need to know which news sites are timely and reliable. You can even pay the extra cash to get a streaming news service sent to your computer desktop. Either way, when you are skilled at trading the news, you aren’t limited to just one asset. Yes, you need knowledge of how certain assets will act in certain situations, but this is not tough to figure out with some study and some practical application. You might be a stock binary option trader, but this wouldn’t have helped you today. Instead, you could have used your knowledge and traded the Nasdaq index, instead. It’s not a huge leap, but it is still a leap. But it would have been very easy to make and it could have resulted in a very big profit for you over the course of just a few minutes.
Trading the news does not require a lot of technical knowledge, or even a vast amount of know-how when it comes to how companies operate internally. You just need to know how negative (or sometimes positive) news will impact a company or some other asset. This is usually common sense, thankfully. It all comes down to getting the information as soon as possible and then acting on it at just the right moment.